The process of a real estate transaction can seem a bit overwhelming; most people only complete it a few times in their lifetime, and it’s different in virtually every state. While not an exhaustive list of possible documents, inspections, and roadblocks, below I have an outline of a typical real estate transaction in order to help you become more familiar with what may occur.
Getting to know you
When we first meet and tell me you are ready to buy a house, before we even start discussing what you want in a house I want to get to know you. What do you like to do? Why do you want to buy a house? What memories do you want to make in a house? If you tell me you are looking to have a place to host Thanksgiving dinner, or a place for the grandparents to come stay for weeks at a time, I will better understand the lifestyle you want in a house versus saying I want “open concept” with a spare bedroom. This will really help me narrow your search more quickly to pinpoint the memories you want to make in your new home. Also, at this time, we will discuss home you intend to purchase the property. If you are financing this purchase, it is extremely important to get pre-approved with a lender before we start looking at properties. We will know how much they are willing to lend, as well as ensure you are comfortable spending as much as you are approved for. When we present an offer to purchase, we will also need to have this pre-approval letter submitted with the offer, so ensuring we have it ahead of time will save us from losing out on a house simply for not being prepared.
Home Showing
We have the opportunity to begin looking at homes immediately as a means of better understanding what you are looking for in a home. But I can also set up a search filter to email you directly on any homes that meet certain criteria. This will enable you to preview and eliminate homes we otherwise might have spent time driving to and seeing just to see that the home actually needed a complete remodel, while you were looking for a turn-key property. This also gives us to see a lot more homes online together, and view in person a select few homes we believe show real potential to be your new home!
Purchase Offer
The written, formal purchase contract is a 9 page contract written by the Arizona Department of Real Estate. There is a lot of language that will not change in it when the offer is made, so it is important to be familiar with it BEFORE you receive an offer. After deciding a certain home is the right one for you, we will meet to discuss the parameters of the offer: of course the price, but also any contingencies, what fixtures we want to stay with the home, as well as how soon we need to have this deal closed by. We also need to be prepared to show how serious we are by providing an earnest money deposit. The seller has the option of accepting your contract as is, rejecting the offer outright, or countering our offer with a change of some of the terms, at which time we have the option of doing the same. This negotiation continues until the two parties agree on terms, or one party decides to walk away from negotiations.
Escrow
Opening escrow is the next step after both buyer and seller sign the sales contract. Escrow describes the neutral party holding the contracts and funds involved in the transaction. In Sierra Vista, the only escrow company currently is Pioneer Title. They will complete a legal title search of the property to ensure the owner has the right to sell the property, and ensure all parties meet the terms as they are outlined in the purchase contract.
Inspections occur within the first few days of the contract agreement. As the buyer, there are VERY IMPORTANT deadlines that we have to meet during this time, so expect to be in even more regular communication with me about what I am doing, and even more importantly, what you need to do, in order to get these done and be able to purchase your new home. Possible inspections include a home inspection to verify the items the seller previously disclosed, as well as insect infestation inspections. It is also during this time that an appraisal is completed by a professional appraiser. As the buyer (and lender, if there is one), you want to confirm that the property is worth what is being paid for it. There is a time limit during which you are able to renegotiate terms of the sale based upon review of the inspections and appraisal. Before closing occurs, you will have an additional “final inspection” of your own you can complete to ensure the property is in the condition that has been agreed to in the purchase contract, following any inspections.
Lending
The majority of home purchases in the United States include a mortgage, the next step in the transaction. The sales contract lists the number of days you have to obtain a mortgage from a lender. The lending process typically requires an escrow period of between 30 and 60 days to complete the underwriting examination of the worth of the house and the credit worthiness of the new buyer.
The final step to close the transaction requires the seller to transfer the legal title to you, the new owner. While you may have seen on TV that closing has all parties in attendance, paperwork is signed, and keys change hands, the process is a little different in Arizona. The buyers and sellers do not typically sign at the same time, and there is usually a couple business days between the time the documents are signed and closing officially occurs. Closing is official when the deed records at the county courthouse in Bisbee. At this time, you will receive your keys, move into your new home, and begin the next chapter in your life!
Conclusion
These are the typical steps during a real estate transaction.Within each one of these steps, though, there are deadlines that need to be met, possible roadblocks that may arise, and perhaps a little stress. My job is to make this process as smooth as possible for you, my client, and to communicate effectively with you regarding your responsibilities. I understand this is not a process you complete on a regular basis, so please give me a call anytime you have any questions about it. Together we can find the new home you are looking for to enjoy for years to come!
